Works in progress
From: Will from Elkhorn Group (noelelkhorngroup.org)
Date: Thu, 29 Nov 2018 20:39:17 -0800 (PST)
As a buyer, you don’t NEED to know the range in which the seller will sell. At 
first, it’s better if you don’t know the seller’s range...

Our thoughts on real estate investing.


** Works in Progress
------------------------------------------------------------

This was, by far, my favorite book of the last three years. Dark Western 
comedy. A mix of Cormac McCarthy and Oh Brother Where Art Thou.

For every purchase, there is a graph of all possible sale prices. On that scale 
is a range in which the buyer will buy and a range in which the seller will 
sell. Hopefully, there is a place where those two ranges overlap! That’s where 
the deal can happen.

As a buyer, you don’t NEED to know the range in which the seller will sell. At 
first, it’s better if you don’t know the seller’s range because you want to be 
able to evaluate where your range is independent of the seller’s asking price.

Don’t let the asking price affect your own better judgement, especially if 
there is emotion involved! What we want to find out is the range in which you, 
the buyer, will buy? Let’s figure that out.

In order to uncover your range, we want to value the purchase. Don’t look at 
the price tag!  (If you’re looking at real estate and want help figuring out 
the value, click here 
(https://elkhorngroup.us19.list-manage.com/track/click?u=08641095a7e94c87149426e4f&id=caf7015943&e=3f8901a062)
 ). Instead of looking at what the seller wants, think about what the item is 
worth to YOU? There is likely some emotion involved here, and timing.

Perhaps you really need a pair of jeans RIGHT NOW for the party tonight and you 
want your butt to look good. Okay then, what is the most you would pay for 
these jeans and still feel happy about the sale? Figure that out, and you have 
your maximum price in the range. Note that number.

Okay so you have a maximum price, how do you now figure out what to offer the 
seller? There are two ways.
1. You can now look at the price tag and pay face value. If it’s at or below 
your maximum price and you don’t feel like negotiating, you can offer the 
asking price. I almost never do that, but you still can if you feel like it.
2. Look at the price tag and negotiate the price. What you’re trying to do here 
is find out the seller’s range. It helps to find something wrong with the item. 
If you bring up anything that’s wrong with the item, this lets the seller lower 
the price without losing face.
They know they priced the jeans too high, but if you ask for a discount without 
giving a reason, there is less chance they will give it to you. Ask, be nice, 
and get on their team. Both of you want the sale. Find the happy place (you can 
read about finding the happy place here 
(https://elkhorngroup.us19.list-manage.com/track/click?u=08641095a7e94c87149426e4f&id=1de70867d0&e=3f8901a062)
 ).

They still might give you a discount for just asking, “can I get a discount?”. 
This is one of the easiest and laziest negotiation tools, but it works because 
most people CAN give you a discount.

At Home Depot, they always give me a discount just for asking. It’s maddening 
because I think they should give the discount to everyone. But they don’t.

The jeans don’t fit perfectly but I need a pair right now, can I get 50% off? 
These jeans are a bit discolored, aren’t they? Do you think you could sell them 
to me for half price? You can say almost anything and the jeans will get 
discounted.

Shoot for the moon. Ask for 50% off. After asking for 50% off, 15% off won’t 
seem like a huge discount to the seller. NOTE: 15% off should be BELOW your 
maximum price. If you’re above your max price after 50% off, you still 
shouldn’t buy it.

Okay, that’s all for now. Please negotiate for things that are expensive. You 
can almost always get the price down and still be a good customer. Stick up for 
yourself and your hard earned money!

If you’d like to learn more about our purchase philosophies, you can do so 
here. 
(https://elkhorngroup.us19.list-manage.com/track/click?u=08641095a7e94c87149426e4f&id=ce35ce9e85&e=3f8901a062)

Hope all is well. Until next time.

Will
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